Wednesday, September 15, 2010

Estate Planning Traps

This is a helpful bit of information that my fellow estate planning colleague, Mark Josephson, posted from his law offices in Montana. He’s relatively new to blogging, but I think he’s done well with this information in a summary format. I am reposting his information to share with you.

I seem to be on a roll this morning over the pitfalls of do-it-yourself estate planning. Here is list of Common Pitfalls and Traps I've had in my basic estate planning handout for clients:

1. “I’m too young to worry.” Reality: If you die young with a spouse and/or children you need to protect your loved ones. Also, by planning early you have the power of leverage/appreciation.

2. “My estate is too small.” Reality: If not planned, a smaller estate can suffer greater percentage shrinkage than a large estate due to increased administration costs necessary in a non-planned estate.

13. Having too little life insurance. If you, the money maker dies, what is your family going to live on? Often life insurance is the only affordable way to solve the problem.

14. Not realizing life insurance you own on your own life is included in taxable estate for federal estate tax. While the proceeds may be income tax free, they are not necessarily estate tax free if you own a policy on your life.

17. Procrastination: Letting indecision lead to inaction. Usually, doing something is better than doing nothing. See my post below on How to Avoid Vapor Lock

18. Lack of Communication. While your estate is private, you should discuss matters with those you intend to have care for you or handle your affairs after your death. Often better planning happens when the younger generation is included and aware of what's going to happen.

19. Not keeping estate plan up to date. You should review your estate plan at least every few years.

I enjoy having Mark as a colleague. For your information Mark does good work, and his firm, Josephson Law Firm, has received the highest rating through Martindale-Hubbell and is listed in the Bar Register of Preeminent Lawyers. Additionally, Mark Josephson has recently been selected by his peers for inclusion in the 2010 edition of The Best Lawyers in America.®

If you have questions about any points Mark makes in this post, please leave them as a “comment” below, or call my office.

Christopher Lavin has offices in Cincinnati, Dayton and Columbus, OH where he assists clients with Elder Law, Asset Protection, and Estate Planning.

His undergraduate studies were at Xavier University, and he studied law at the University of Dayton School of Law. He is currently accepted to practice before the bar in Ohio and Kentucky. A one hour "get acquainted" meeting can be arranged by calling him at 513.257.0701 or info@lavin-elderlaw.com.